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POST LIBERATION DAY ECONOMICS: JOBLESS CLAIMS, LAYOFFS, SERVICES PMI, TRADE

Investors staggered into the "liberation day after" to be greeted by generally muted economic data, the cumulative effect of which was "calm before the trade war storm."

Last week, 219,000 U.S. workers filled out fresh applications for unemployment benefits USJOB=ECI, an unexpected 2.7% weekly decrease, undershooting consensus by 6,000.

The pace of layoffs has been low and rangebound; in fact, the underlying trend, as expressed by the four-week moving average of initial claims, has a slightly downward bias.

But how long can that last?

A separate report from executive outplacement firm Challenger Gray & Christmas $(CGC.AU)$ USCHAL=ECI showed that in March, corporate America announced it would lay off 275,240 workers, a 60% increase over February.

It's a whopping 205% more than planned layoffs announced in March 2024.

What's more, the massive job cuts ordered by billionaire Elon Musk's Department of Government Efficiency accounted for nearly 79% of the total.

"It would have otherwise been a fairly quiet month for layoffs," said Andrew Challenger, CGC's workplace expert.

Ongoing jobless claims USJOBN=ECI, reported on a one-week lag, jumped by 3.0% to 1.903 million, topping the 1.870 million analysts expected. Elevated continuing claims support recent consumer survey data suggesting laid off workers are finding it increasingly difficult to find a replacement gig.

"Initial jobless claims remain stuck in their recent groove," writes Nancy Vanden Houten, lead U.S. economist at Oxford Economics (OE). "While continued claims continue to trend slightly higher, underscoring that while private sector layoffs have been relatively low, unemployed workers face challenges finding new jobs in a slow hiring environment."

Looking to services, which typically accounts for around 80% of monthly private payroll gains, the sector's expansion lost momentum last month.

The Institute for Supply Management's (ISM) non-manufacturing purchasing managers' index $(PMI.UK)$ USNPMI=ECI dipped 2.7 points to 50.8, a steeper deceleration than the half-point dip consensus predicted.

A PMI reading north of 50 indicates monthly expansion.

A closer gander at the index's subcomponents shows new orders dropped, employment entered contraction, as did order backlog and new export orders.

Prices paid - an inflation predictor - lost a bit of steam, giving up 1.7 points to a still-elevated 60.9.

The report "will exacerbate concerns over the health of the economy," says Matthew Martin, senior U.S. economist at OE. "Uncertainty continues to weigh on the index, with businesses reporting decreased hiring and investment plans as they navigate the impacts of tariffs and federal layoffs."

S&P Global also had its say, releasing its final take on March services PMI USMPSF=ECI, providing a cheerier view of the sector, inching up to 54.4.

"March saw a welcome rebound in service sector business activity after a weak start to the year, with employment also returning to growth after a decline seen in February," says Chris Williamson, Chief Business Economist at S&P Global.

"Companies report heightened concerns and uncertainty around the impact of political change," Williamson adds. "Concerns have also risen in relation to costs, which rose in March at the fastest rate in nearly two years as firms across both services and manufacturing reported intensifying supplier-driven price hikes, fueled by tariffs."

S&P Global and ISM indexes differ in the weight applied to their various components.

This shows the extent of the dueling PMIs' disagreement:

And now, shifting to a word on everyone's lips today: trade.

The trade gap USTBAL=ECI, or the difference in the value of goods and services imported to the U.S. and those exported abroad, narrowed in February by 6.1% to $122.7 billion, pulling back from January's record high.

Under the hood, a 2.9% increase in exports was dampened by imports, which account for the lion's share of the United States' total international trade, remaining essentially unchanged.

The data, of course, does not reflect the implementation of Trump's barrage of trade war-provoking tariffs unleashed on Wednesday.

Months from now we can gaze back at this graphic with pre-trade war nostalgia; showing the value of goods and services imported from Canada, China and Mexico.

Call it a "before" snapshot:

(Stephen Culp)

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FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:

S&P 500 SINKS AMID MOUNTING RECESSION FEARS - CLICK HERE

GEARING DOWN CRUISE MODE: SCOTIABANK DOWNGRADES US EQUITIES AFTER LATEST TARIFFS - CLICK HERE

S&P 500 FUTURES TRADE SHARPLY LOWER ON TARIFF TUMULT - CLICK HERE

DON'T BANK ON FED CUTS AFTER TARIFFS - COLUMBIA THREADNEEDLE CIO - CLICK HERE

TENTATIVE OPTIMISTS MULL BEST OUTCOME AFTER TRUMP TARIFFS - CLICK HERE

TARIFF RISKS, IS PHARMA OUT OF THE WOODS? - CLICK HERE

DEFENSIVE BUYING LIMITS THE DAMAGE - CLICK HERE

EUROPE BEFORE THE BELL: HEAVY SELLOFF COMING - CLICK HERE

SEEMS INVESTORS REALLY DON'T LIKE TARIFFS - CLICK HERE